"No matter how you slice or dice the calendar, there is no question that the summer of 2016 thus far has been a bit of a bummer,” box office analyst Paul Dergarabedian told the Hollywood Reporter. Box office receipts are down 22 percent compared with last summer, and panic is starting to set in among the Tinseltown elite. Many studio executives are hoping potential blockbusters like “Finding Dory” and “Ghostbusters” can pull them out of this slump, but, at the moment, the situation looks dire indeed.
In that kind of uncertain financial environment, it seems likely that Hollywood would be interested in making more money wherever it can. So why are Disney, Warner Brothers, 20th Century Fox and Lucasfilm suing VidAngel, a small Utah startup company that allows customers to view cleaned-up versions of their movies?
The joint complaint from these four major movie studios states that VidAngel "blatantly violates the Copyright Act and confers on itself unfair and unlawful advantages vis-a-vis licensed services in the (video on demand) marketplace.” While there are unique legal technicalities in this dispute, this is the latest iteration of a long-standing feud between Hollywood and a sizable chunk of its customer base which arguably began back in 1998, when a video store in American Fork offered to cut out offensive scenes from videotapes of “Titanic” for a $5 fee. This brought down the wrath of the studios and garnered a great deal of national attention.
Today, the technology has changed considerably, but the arguments haven’t changed at all. Studios insist they are protecting the integrity of their products by keeping the content of the releases unaltered, while consumers maintain that what they do with that content after they’ve purchased it is entirely their own business.
This long-standing dispute ought to be a signal to Hollywood that there is a fast, underserved market that it's neglected for decades. If studios were willing to make edited versions of these movies available for public consumption, they would effectively put companies like VidAngel out of business. For decades, they have released “edited-for-television” editions of films for broadcast TV and for use on airline flights, so this wouldn’t be new territory for them. They would also get to keep all the revenue themselves, instead of wasting their cash on lawsuits against VidAngel and the next company that comes along trying to meet the demand they’re unwilling to satisfy.
The conventional wisdom is that Hollywood is only interested in making money. And right now, Hollywood is losing money. Now more than ever, studio shareholders ought to be asking why these companies are leaving money on the table by refusing to license edited versions of their films.